Reuters – London – 4/1/26

Bank of England Governor Andrew Bailey said on Wednesday that markets were still getting ahead of themselves by pricing in ​interest rate hikes by the central bank in response to the ‌hit to the British economy from the Iran war.

“(The market)’s still pricing us to raise rates. I would still ​say that is a ​judgment markets have ⁠to make but I think they’re getting ahead of themselves,” Bailey said.

Bloomberg 3/18/26

Treasuries came under selling pressure on Wednesday, led by the front-end of the curve after the Federal Reserve held rates steady in an 11-1 vote, while upgrading growth projections and still forecasting one cut by the end of this year. In the press conference, Chair Jerome Powell said there couldn’t be rate cuts until there is progress on inflation and didn’t rule out potential for rate hikes in the future, though that’s not a base case for the Fed

Bloomberg 3/18/26

*FED SAYS GOVERNOR STEPHEN MIRAN DISSENTS IN FAVOR OF RATE CUT

Bloomberg 3/17/26

Australia’s central bank raised its key
interest rate for a second straight meeting on Tuesday, stepping
up its battle against stubborn inflation as rising energy costs
from the widening war in Iran threaten to intensify price
pressures.
The Reserve Bank’s nine-member policy committee split five-
to-four in favor of raising the cash rate to 4.1% from 3.85%.
This was the first back-to-back hike since mid-2023 and reverses
two of the three cuts delivered last year.

Bloomberg 3/14/26

The US struck military sites on Kharg
Island, from which Iran exports almost all its oil, for the
first time overnight, upping the ante in a Middle East war
that’s raged for more than two weeks and shows little sign of
easing.
President Donald Trump said military facilities on the
Persian Gulf island had been “obliterated,” adding that he chose
not to hit oil infrastructure “for reasons of decency.” He
threatened to do just that should Iran “do anything to interfere
with the Free and Safe Passage of Ships through the Strait of
Hormuz.”

Axios 3/20/26

The Trump administration is considering plans to occupy or blockade Iran’s
Kharg Island to pressure Iran to reopen the Strait of Hormuz, four sources
with knowledge of the issue tell Axios.

Bloomberg 3/10/26

European bonds rebounded on Tuesday as traders seized on a drop in energy prices to dial back the extreme moves seen at the start of the week.

Italian bonds led the recovery in the euro area as 10-year yields slid five basis points to 3.56%. Markets now price fewer than 25 basis points of monetary tightening from the European Central Bank, compared with more than a half percentage point at one stage on Monday.

MT Newswires 3/18/26

The Federal Open Market Committee kept the Federal Funds rate target unchanged at 3.50% to 3.75%, its statement Wednesday afternoon showed.

The policy committee’s vote was mostly unanimous, with Governor Stephen Miran being the lone dissenter, preferring to lower the target range for the Fed Funds rate by 25 basis points.

Bloomberg 3/19/26

The Swiss National Bank restated its heightened readiness to sell the franc as officials held back again from the more drastic step of cutting borrowing costs into negative territory.

Policymakers led by President Martin Schlegel left their benchmark at zero on Thursday for the third consecutive meeting, as predicted unanimously by economists. Officials kept up their commitment to sell the currency if required to prevent its gains from weighing too much on inflation.

“A rapid and excessive appreciation of the Swiss franc poses a risk to price stability,” Schlegel told reporters in Zurich. “To counter this risk, our willingness to intervene in the foreign exchange market has increased.”

Bloomberg 3/19/20

Bank of Japan Governor Kazuo Ueda kept the
possibility of an April interest rate hike on the table after
leaving policy unchanged Thursday amid uncertainty over the
impact of the Middle East conflict on the economic outlook.
Speaking at a press briefing after the central bank’s
decision he said that downward pressure on the economy stemming
from the impact of the hostilities would likely be temporary.
“Even if economic growth were to decline, if that
development is temporary and there’s not so much impact on the
trajectory of the price trend then of course it will be possible
to raise interest rates,” he said.

Bloomberg 3/18/26

The Bank of Canada held interest rates steady, saying it would “look through” the Middle East war’s immediate inflation impact as it kept focus on downside growth risks.

Officials led by Governor Tiff Macklem kept the policy rate at 2.25% on Wednesday, matching expectations of markets and a majority of economists in a Bloomberg survey.

Bloomberg 2/3/26
Australia’s central bank raised its key interest rate Tuesday after judging inflation pressures were persistent enough to warrant renewed restraint but not strong enough to signal further hikes are possible.
While it warned in its statement that “inflation is likely to remain above target for some time,” Governor Michele Bullock in a briefing avoided any hints that further tightening was possible.
“I don’t know if it’s in a cycle, certainly it’s an adjustment,” she said when asked if the bank was in a new tightening phase. “We are in a position where we think we might be around neutral.” “It’s not clear one way or the other,” she said.

Bloomberg 2/5/26
The European Central Bank kept interest rates unchanged as officials assess the economic toll of a rally in the euro and renewed trade unpredictability.
The deposit rate was left at 2% on Thursday — as predicted by all economists in a Bloomberg survey. The ECB didn’t offer guidance on future steps, reiterating that incoming data will steer decision-making.
“The economy remains resilient in a challenging global environment,” it said in a statement. “At the same time, the outlook is still uncertain, owing particularly to ongoing global trade policy uncertainty and geopolitical tensions.”

Dow Jones OTTAWA 1/28/26
The Bank of Canada on Wednesday kept its policy rate unchanged at 2.25% in a second-consecutive decision, and warned the level of uncertainty stemming from U.S. trade policy and geopolitical risks has ramped up.
The consensus among senior officials “was that elevated uncertainty makes it difficult to predict the timing or direction of the next change in the policy rate,” Gov. Tiff Macklem said. Prior to Wednesday, most economists surveyed by the Journal predicted the central bank would hold the policy rate steady through 2026.
Macklem said U.S. trade policy continued to disrupt the domestic economy. Central-bank officials project that economic growth stalled in the fourth quarter, after a surprise jump in the previous quarter buoyed by net trade.

Bloomberg 1/28/26
Federal Reserve officials left interest rates unchanged and pointed to improvements in the US economy as they signaled a more cautious approach to potential future adjustments.
In a post-meeting statement, policymakers said “job gains have remained low, and the unemployment rate has shown some signs of stabilization.” Officials also dropped language pointing to increased downside risks to employment that had appeared in the three previous statements.

Wall Street Journal 1/28/26
Two Fed governors — both appointed by President Trump — dissented against the decision and favored a quarter-point rate cut. The Fed’s 12-person rate-setting committee includes seven presidentially-appointed governors and five regional bank presidents who aren’t political appointees.
Powell’s term as chair ends in May, and Trump’s advisers have said he is close to naming a successor. Governor Christopher Waller, one of four finalists, opposed Wednesday’s decision. Analysts had said casting a dissenting vote may have been a precondition for keeping his long-shot candidacy viable.
Governor Stephen Miran also dissented. Since Trump named him to fill a short-term vacancy on the Fed’s board last summer, he has dissented at all four policy meetings he has attended in favor of lower rates.

Bloomberg. 2/5/26
The Bank of England came within a vote of cutting interest rates and predicted inflation will fall below its target, a closer-than-expected decision that revived hopes of a move next month.
Governor Andrew Bailey was once again the swing voter in a 5-4 decision to leave rates unchanged at 3.75%, choosing to hold policy having cut at the last meeting in December. Bailey said in a statement that “there should be scope for some further reduction in bank rate this year.”
In updated forecasts, the BOE predicted inflation will be at its 2% target in April and warned of slowing growth and rising unemployment.
The Monetary Policy Committee’s decision was far more dovish than anticipated, with the close call not reflected in market pricing before the meeting for a near-zero chance of a reduction. Earlier Thursday, the pound dipped and gilt yields rose as speculation mounted over the future of Prime Minister Keir Starmer.
The pound extended losses, falling as much as 0.8% to $1.3550, and traders ramped up bets on rate cuts to price more than a 50% chance of a quarter-point move in March. They expect 45 basis points of reductions in total by year-end.

Bloomberg 1/23/26

* The central bank raised its GDP growth forecasts for fiscal
2025 and 2026, which start in April, reflecting easing global
uncertainty and support from the stimulus package under Prime
Minister Sanae Takaichi.

*On long-term yields, Ueda noted that supply-demand
conditions in the ultra-long segment have become unstable due to
fiscal year-end factors. He stressed close communication with
the government and reiterated that the BOJ would conduct stable
and nimble operations in exceptional circumstances to reassure
markets.

Wall Street Journal — WASHINGTON 1/28/26
The Federal Reserve entered a new holding pattern on interest rates Wednesday and signaled little urgency to resume cuts after contentious reductions at officials’ three previous meetings.
The decision to hold the benchmark federal-funds rate steady in a range between 3.5% and 3.75% was approved on a 10-2 vote.
Officials made fairly modest changes to the post-meeting statement explaining their decision, retaining language that typically has signaled openness to further moves without suggesting any hurry to make them.
“We’re not trying to articulate a test for when to next cut or whether to cut at the next meeting,” Fed Chair Jerome Powell said at a news conference. “What we’re saying is we’re well positioned as we make decisions, meeting by meeting.”

Bloomberg 1/23/26
While Ueda had suggested that overall inflation will weaken
below 2% soon, he also left open the possibility of an early
rate hike.
“April is a month where there’s relatively high numbers of
price revisions,” Ueda said. “We have a certain amount of
interest in that, and while it’s not the most important factor
in deciding the next rate hike, it’s one of the factors.”

Bloomberg 1/24/26
Speculation mounted into the weekend that
Japanese authorities could be preparing to enter currency
markets in a bid to halt the yen’s slide, possibly with the rare
assistance of the US.
The yen rallied as much as 1.75% to 155.63 per dollar on
Friday, extending the gains seen during the Asian trading day to
its strongest level of the year. The move was the biggest one-
day surge since August and reversed what had been a slide toward
levels last seen in 2024, when Japan stepped in to buy its
currency.
The jump in the US session came as traders reported that
the Federal Reserve Bank of New York had contacted financial
institutions to ask about the yen’s exchange rate. Wall Street
saw those inquiries as a potentially laying the ground for Japan
to intervene to prop up the yen, perhaps even with the US
government joining in.

Washington Post 1/28/26
The Federal Reserve kept interest rates unchanged Wednesday, hitting the pause button at its first meeting this year despite pressure from President Donald Trump to slash rates further.
With job growth still decelerating but the economy showing few signs of distress, policymakers now say they can afford to be patient as they watch whether inflation continues to cool.

AFP 2/5/26
The European Central Bank kept interest rates unchanged Thursday for a fifth time in a row, saying it expected inflation to stabilise at its two-percent target “in the medium term”.

Politico US 1/6/26
U.S. officials also expect Rodriguez — the former vice president now running
Venezuela — to eventually facilitate free elections and step aside, the two
people said. But the deadlines for the demands are fluid, and U.S. officials
stress there are no elections imminent.

Bloomberg 1/8/26
The US will not cut off China from accessing Venezuelan oil, Energy Secretary Chris Wright says on Fox News.
“We’re not going to cut off China — the illicit trade in oil with Iran and Russia, the illegal gun-running stuff, that’s going to be cut off and stopped,” Wright says
“China is a giant commercial economy, and no, China is going to continue to buy Venezuelan oil,” he adds when asked if US would cut off Venezuelan oil shipments to China